Medicare Premiums Deduction

The Medicare Premium Deduction allows the client to deduct the amount of Medicare premiums (for Parts A, B, and D) that they actually pay.

Note: Premiums paid to a Medicare Part C (Medicare Advantage) plan should not be deducted as a Medicare premium, but rather as a health care coverage premium, a deduction which is found later in this section. Part C plans can pay for a portion of the Part B premium. Do not deduct the portion of the premium for which the plan pays, but do continue to deduct the portion for which the client continues to be responsible.

Do not allow a deduction for any amount that is paid or will be paid through:

Cost effective reimbursement.
The Buy-In.
A process of paying for the Medicare Part B premium that is generally for people receiving automatic MA benefits but also for people enrolled in a Medicare Savings Program (MSP). More information regarding the Buy-In is found in the Eligibility Policy Manual.
Extra Help.

Remember! You must verify the amount of the Medicare premiums the client actually pays before you can allow the deduction. Medicare premiums can vary based on many factors. Use VerifyMN/SOLQI or SVES/TPQY processes to verify Medicare Part A and B premium amounts. Request proof of premium amounts from the client for Medicare Part C and D (if the client is enrolled in these Parts), and Part A and B premiums if electronic information is inconsistent. More information about Medicare premiums is available in the in ONEsource and the Eligibility Policy Manual. You can also find more information on the Medicare website.

Also remember that the deduction must be updated for the month in which it is no longer allowed, or when the client has a change in circumstance.

Example:

Can you use this deduction on Emily’s or Andreas’ LTC income calculation?

Andreas:

Despite the fact that Andreas does not have any income remaining after the SSI deduction, do not allow this deduction for Andreas because QMB is paying for his Medicare Part A and B premiums and Extra Help is paying for his Medicare Part D premium.

Emily:

Allow this deduction for Emily. Emily pays for her Medicare Part B premium and her Medicare Part D premium which she pays along with her Medicare C plan.

We can deduct a portion of her Part D premium, (based on the information found on the current year “Amounts in Excess of Medicare Part D Benchmark to Apply as a Medical Expense” chart found in ONEsource) because she will be eligible for Extra Help when MA-LTC eligibility is approved. This means that we can deduct the amount of the Part D premium in excess of the benchmark amount.

We can deduct all of her Part B premium, because we have already determined that she is not eligible for an MSP.

The total Medicare Premiums Deduction allowed is the sum of her Part B premium plus the Part D premium in excess of the benchmark, found on the ONEsource chart.

To Do: Take a minute to calculate and input this deduction on Emily’s LTC Income Calculation Worksheet.

Page 4

LTC Income Calculation - Deductions and Allowances

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